Q1 2024 Cepton Inc Earnings Call
Good day and welcome to the <unk>, Inc. First quarter, 'twenty 'twenty four business update and earnings call.
Good day, and welcome to the Cepton, Inc. First Quarter 2024 Business Update and Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dennis Cheng, Interim Chief Financial Officer. Dennis, please go ahead.
At this time all participants are in a listen only mode.
A brief question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Dennis Chang inter.
Dong Chang: Interim Chief Financial Officer.
Dong Chang: Please go ahead.
Thank you, and welcome to Cepton's first quarter 2024 earnings call and business update. With me today are Jun Pei, co-founder and chief executive officer, and Mitch Hourtienne, Chief Commercial Officer.
Dong Chang: Thank you and welcome to <unk> first quarter, 'twenty 'twenty four earnings call and business update.
Dong Chang: With me today, I didn't pay co founder and Chief Executive Officer and.
Dong Chang: And Mitch for Genie, Chief commercial officer.
Dong Chang: During the call we may refer to our unaudited GAAP and non-GAAP measures in our earnings release.
During the call, we may refer to our unaudited GAAP and non-GAAP measures in our earnings release. The non-GAAP financial measures should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with U.S. GAAP. Reconciliations for non-GAAP measures are included in our earnings release.
Dong Chang: The non-GAAP financial measures should not be considered.
Dong Chang: As a substitute for or superior to the measures of financial performance prepared in accordance with U S. Scott.
Dong Chang: Reconciliations for non-GAAP measures are included in our earnings release.
Dong Chang: I would like to remind everyone that comments made in this conference call May include forward looking statements regarding the company.
I would like to remind everyone that comments made in this conference call may include forward-looking statements regarding the company's expected operational and financial performance for future periods. These statements are based on the company's current expectations and are subject to the safe harbor statements relating to forward-looking statements contained in our earnings release and the presentation slides that accompany this call. Actual results for future periods may differ materially from those expressed or implied by this forward-looking statement.
Dong Chang: Specced at operational and financial performance for future periods.
Dong Chang: These statements are based on the company's current expectations.
Dong Chang: And are subject to the safe Harbor statements relating to forward looking statements contained in our earnings release.
Dong Chang: And the presentation slides that accompany this call.
Dong Chang: Actual results for future periods may differ materially from those expressed or implied.
Dong Chang: These forward looking statements.
Due to a number of risks, uncertainties, or other factors, including those discussed in the earnings release or during today's call and those described in our filings with the U.S. Securities and Exchange Commission. We are not undertaking any obligation to update these statements as a result of future events, except as required by law. As a quick reminder, this call is being recorded, and you can find the earnings release and presentation slides that accompany this call, as well as the webcast replay of this call, at www.investors.cepton.com. Now, I would like to turn the call over to Jun.
Dong Chang: Due to a number of risks uncertainties or other factors, including those discussed in the earnings release.
Dong Chang: During today's call.
Dong Chang: And those described in our filings with the U S Securities and Exchange Commission.
Dong Chang: We're not undertaking any commitment to update these statements.
Dong Chang: That's pretty solid kind of future events.
Dong Chang: Except as required by law.
Dong Chang: And so a quick reminder, this call is being recorded and you can find the earnings release and presentation slides that accompany this call as well as the web cast replay of this call.
Dong Chang: Www dot investors sat phone dot com.
Dong Chang: Now I would like to turn the call over to Jim.
Jim: Thank you Dennis and good afternoon, everyone.
Thank you, Dennis. And good afternoon, everyone.
Jim: Thank you for joining <unk> first quarter of 'twenty 'twenty four earnings call.
Thank you for joining Ceptown's first quarter 2024 earnings call. We will provide a business update and review our first quarter financial results with you. First, an update on our latest long-range LiDAR product, Cepton Ultra. As part of our ongoing efforts to advance automotive safety and efficiency through cutting-edge technology, I'm pleased to provide an exciting update on our ultra-LiDAR system. We have successfully advanced ULTRA from its initial concept to the B-sample stage much quicker than anticipated, and the performance of the ULTRA B-samples has exceeded our expectations.
Jim: We will provide a business update and review our first quarter financial results with you.
Jim: First.
This rapid progression is a testament to our robust R&D capabilities and deep technical expertise, and achieving this key development milestone underscores our commitment to innovation and market leadership. We have demonstrated the Ultras capabilities to OEMs across three continents, in Japan, the United States, and Europe. These live demonstrations not only validated our LiDAR system's performance under various conditions but also showcased its versatility and robustness in real-world environments. The feedback from these global showcases has been overwhelmingly positive, affirming Altra's potential to transform automotive safety standards and its readiness for broader commercial deployment. Our outdoor product features our proprietary imaging technology, MagnoStere, which allows for a dynamic field of view, region of interest adjustment, and high-resolution scanning.
An update on our latest the long range Lidar products.
This technology has performed above expectations, offering enhanced adaptability and higher data fidelity in the B-samples. The advancements in our ultra LiDAR system mark a pivotal step forward in our mission to drive the widespread adoption of LiDAR technology in automotive applications. As we continue to push the boundaries of what's possible, we remain focused on delivering products that not only meet but also exceed the rigorous demands of the automotive industry. I've always stated that technological advancements do not create value without commercial traction.
Jim: Ultra.
Jim: As part of our ongoing efforts to advance the automotive safety and efficiency through cutting edge technology I'm pleased to provide an exciting update on our ultra lidar system.
Jim: Have successfully advanced the altra promise the initial concept to the b sample stage much quicker than anticipated.
Jim: The performance of the Ultra V samples has exceeded our expectations.
Jim: This rapid progression is a testament to our robust R&D capabilities and deep technical expertise and achieving this key development milestone underscores our commitment.
Jim: Ovation and market leadership.
Jim: We have demonstrated the ultras capabilities two oh, yes across the three continents in Japan.
Jim: It just stays in Europe.
Jim: These live demonstrations not only validated our lidar systems performance under various conditions, but also showcased its versatility and robustness in real world environments.
Jim: The feedback from these global showcases has been overwhelmingly positive.
Jim: So for me the Altra has the potential to transform automotive safety standards and its readiness for a broader commercial deployment.
Jim: Our ultra product features our proprietary imaging technology magno sphere, which allows for dynamic fueled a real regional interest adjustment and high resolution scanning.
Jim: This technology has performed above your expectations offering enhance the adaptability and higher data fidelity in the B samples.
Jim: Yeah, the last months in our ultra Lidar system, Mark a pivotal step forward in our mission to drive widespread adoption of Lidar technology in automotive applications as.
Jim: As we continue to push the boundaries of what's possible, we remain focused on delivering products that not only meet but also exceed the rigorous demands of the automotive industry.
Speaker Change: I've always stated that technology advancements do not create value without commercial traction today.
Today, I'm proud to announce that we have secured a series production project with a global OEM in collaboration with COITO to supply our near-range LiDAR sensors. This multi-year OEM project underscores our technology competitiveness and the trust that industry leaders place in our solution. To jumpstart this project, Cepton has entered into a significant engineering services contract with Coito, which includes $10 million in fees for work to be performed in the second quarter of 2024.
Speaker Change: Today I'm proud to announce that we have secured a series production project with a global Oh, yeah in collaboration with Koito to supply our near range Lidar sensors.
Speaker Change: This multiyear OEM project underscores our technology competitiveness and the trust that the industry leaders placed in our solutions.
Speaker Change: Jumpstarted This project.
Speaker Change: How has entered into a significant engineering services contract with Quito, which includes $10 million in fees for work to be performed in the second quarter of 2020 for.
This contract is designed to support the execution of the new OEM program and accelerate product development, ensuring that we meet and exceed the specific needs of our automotive customers. We expect to have positive cash flow for the three months ended Q2 2024, a significant achievement not only for our company but also within the LiDAR industry. With that, I'll turn it over to Mitch for more details on our efforts with customer programs.
Speaker Change: This contract is designed to support the execution of the new OEM program and accelerate product development and ensuring that we meet and exceed the specific needs of our automotive customers.
Speaker Change: We expect to have positive cash flow for the three months ended Q2 2024.
Speaker Change: This is an achievement not only for our company, but also within the light our industry.
Speaker Change: With that I'll turn it over to Mitch for more details on our efforts with customer programs.
Mitch: Thank you Jim.
Today, I'm excited to share significant developments in our business partnerships and new opportunities that highlight Cepton's growing influence in the global automotive market. As June announced, our significant NRE contract with Coedo marks a huge milestone for Cepton on multiple fronts. First, we expand our series production awards beyond the North American continent with this win.
Mitch: Today I'm excited to share significant developments in our business partnerships and new opportunities that highlight step downs growing influence in the global automotive market.
Mitch: As Juno are significant and our <unk> contract with Quito marks a huge milestone for Stefan on multiple fronts.
Mitch: First we expand our series production awards beyond the North American continent with this win.
Mitch: Second we demonstrate product scalability with this near range Lidar win.
Second, we demonstrate product scalability with this near-range LiDAR WAN. And last, but certainly not least, we expect to become cash flow positive this quarter for the first time in the company's history, and we believe this is also a first within the LiDAR industry. Large global OEMs are very selective in these early days of LiDAR adoption, and we're proud to gain the trust of another global OEM. The commercials associated with this project are expected to be significant, starting with revenue this quarter.
Mitch: And last but certainly not least we expect to become cash flow positive this quarter for the first time in the company's history.
And we believe this is also a first within the light our industry.
Mitch: Large global Oems are very selective in these early days of Lidar adoption and we're proud to gain the trust of another global Oh, Yeah.
Mitch: The commercials are associated with this project are expected to be significant.
Mitch: Starting with revenue this quarter.
Mitch: Beyond this win we are actively expanding our market reach with the missions for RF queues from some of the world's largest automotive manufacturers.
Beyond this win, we are actively expanding our market reach with submissions for RFQs from some of the world's largest automotive manufacturers. We recently completed the final submission for an RFQ to a top 10 global automotive OEM for our long-range LiDAR technology, and we expect a formal decision before our next earnings call.
Mitch: We've recently completed the final submission for and ask you to a top 10 global automotive OEM.
Mitch: Our long range Lidar technology, and we expect a formal decision before our next earnings call.
This is a pivotal step towards securing a broader adoption of our LiDAR solutions in the automotive sector. We've also made our first RFQ submission to a top three global automotive OEM for both long range and near range LiDAR. As OEMs expand their use of LiDAR and next-generation ADAS offerings to include both long-range and near-range LiDAR, Cepton is in a very unique position offering both products, positioning us well for further market share gain.
Mitch: This is a pivotal step towards securing a broader adoption of our lidar solutions in the automotive sector.
We've also made our first RF skews submission to a top three global automotive OEM for both long range and Nir range Lidar.
Mitch: As Oems expand their use of Lidar and next generation Adas offerings to include both long range and Nir range Lidar Stefan is in a very unique position offering both products.
Mitch: Joining us well for further market share gains.
Mitch: As a lighter hardware solutions are harden for automotive deployment, our software ecosystem is also expanding.
As our lighter hardware solutions are hardened for automotive deployment, our software ecosystem is also expanding. Last week, Cepton announced StudioViz, our LiDAR simulator aimed to accelerate OEM development and reduce data collection costs. Our solution stands out from the pack as we include manufacturing variances into the simulator, a key ingredient that stems from our long-standing work with Coito manufacturing. StudioViz is just one pillar of our software ecosystem development kit, which will further expand in the coming months and years as we further understand OEM challenges and work to include more efficient solutions and value in Cepton products.
Last week stepped down announced studio beds, or lidar stimulator aimed to accelerate OEM development and reduced data collection costs.
Mitch: Our solution stands out from the pack. If we include manufacturing variances into the simulator.
Mitch: A key ingredient that stems from our long standing work with Quito manufacturing.
Mitch: Studio or is it just one pillar of our software ecosystem development kit, which will further expand in the coming months and years as we further understand OEM challenges.
Mitch: Work to include more efficient solutions and value and stepped on products.
Mitch: We're excited to continue our global road show of our highly successful ultra product and to execute our new OEM series production win.
We're excited to continue our global roadshow of our highly successful Ultra product and to execute our new OEM series production win. Stay tuned for more good news from Cepton in the coming quarters.
Mitch: Stay tuned for more good news from stepped on in the coming quarters next I'll turn it back to Dennis.
Dong Chang: Thank you Mitch.
Starting with our first quarter results.
Starting with our first quarter results. Total revenue for the quarter was $1.9 million, consisting of $1.1 million in product revenue and $0.8 million in development revenue. Total revenue increased by 31% compared to $1.5 million in the prior year comparable period. First quarter gap net loss was $6.8 million, or 43 cents a loss per share, basic and diluted. Non-Gap Net Loss was $8.3 million, or $0.52 per share, basic and diluted. First quarter non-gap adjusted EBITDA was negative $8.9 million.
Dong Chang: Total revenue for the quarter was $1 9 million.
Dong Chang: <unk> of $1 $1 million in product revenue and zero point $8 million in development revenue.
Dong Chang: Total revenue increased by 31% compared to $1 5 million in the prior year comparable period.
Dong Chang: First quarter GAAP net loss was $6 8 million.
Dong Chang: Or 43 cents loss per share basic and diluted.
Dong Chang: non-GAAP net loss was $8 3 million.
Dong Chang: Or 52 cents loss per share basic and diluted.
First quarter non-GAAP, adjusted EBITDA was negative $8 $9 million.
In the first quarter, we recorded a $4.0 million gain from the GM project cancellation recovery. This was the initial payment received from COITO, and the cost recovery process is ongoing. As of March 31st, 2024, we had approximately $49.2 million in cash and cash equivalents. Our full year 2024 guidance for revenue is expected to be between 15 and 25 million dollars, while operating expenses are expected to be below $50 million.
Dong Chang: During the first quarter, we recorded a 4.0 million gain from the GM project cancellation recoveries.
Dong Chang: This was the initial payments received from Colorado and the cost recovery process is ongoing.
Dong Chang: As of March 31st 'twenty 'twenty, four we had approximately $49 2 million in cash and cash equivalents.
Dong Chang: Our full year 'twenty 'twenty four guidance for revenues is expected to be between 15 and $25 million.
Dong Chang: Operating expenses are expected to be below $50 million.
Dong Chang: We look forward to seeing everyone at our annual shareholders meeting scheduled on June 17th.
We look forward to seeing everyone at our annual shareholders meeting scheduled on June 17. And with that, I'd like to open up the call for questions. Thank you.
Speaker Change: And with that I'd like to open up the call for questions.
Speaker Change: Thank you we will now be conducting a question and answer session.
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. And you may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key.
One moment, please, while we pull for questions. Thank you. Our first question comes from the line of Matthew Galinko with Maxim Group. Please proceed with your question.
Speaker Change: Like to ask a question. Please press star one on your telephone keypad.
Speaker Change: A confirmation tone will indicate that your line is in the question queue.
Speaker Change: And you May press star two if you'd like to remove your question from the queue.
Speaker Change: For participants using speaker equipment.
Speaker Change: It may be necessary to pick up your handset before pressing the star keys.
Speaker Change: One moment, please while we poll for questions.
Speaker Change: Thank you. Our first question comes from the line of Matthew <unk> with Maxim Group. Please proceed with your question.
Hi, thanks for taking my questions. Maybe firstly, just on the $4 million gain, I just wanted to, on the GM cost recovery, I just wanted to clarify, Was that a cash payment, or was cash received in the first quarter?
Matthew: Hi, Thanks for taking my questions.
Matthew: Firstly, just on the $4 million gain I just wanted to on the GM cost recovery I just wanted to clarify.
Matthew: Is that a.
Matthew: Was that a cash payment or it was.
Matthew: Cash received in in the first quarter.
Yes, the $4 million is a cash payment. It has already been received in the first quarter.
Yes, the $4 million is a cash payment.
Matthew: It's been received in the first quarter.
Speaker Change: Got it okay. Thank you and then secondly can you help us frame for the new production win congratulations on that when when should we expect or when could we start to expect.
Got it. Okay, thank you. And then secondly, can you help us frame for the new production when, and you know, congratulations on that? When, when should we expect or when could we start to expect? [inaudible] Production revenue from that. Is that, you know, a 2026 event or, you know, is there anything more you could say about that?
Speaker Change: You know.
Speaker Change: Production revenue from that is that too.
Speaker Change: <unk> 2026 event or you know is there anything more you can say about that.
Speaker Change: Hey, Matt This is Mitch yeah. That's a good question. So we noted that we will begin collecting.
Hey Matt, this is Mitch.
Yeah, that's a good question. So we noted that we'll begin collecting development revenues this quarter, and then sample product revenues are also starting this quarter. For the high volume production revenue, it's, you know, most of these programs are typically sourced two and a half to three years ahead of the start of production, and that's the case for this project as well.
Mitch: Development revenues this quarter.
Mitch: And then sample product revenues are also starting this quarter.
Mitch: For the high volume production revenue.
Mitch: You know most of these programs are typically source.
Mitch: Two and a half to three years ahead of the start of production.
Mitch: It's the case for this project as well.
Speaker Change: Thank you and one last follow up question on that would be I guess, given the $10 million.
Thank you. And one last follow-up question on that would be, I guess, given the $10 million component of that, that sounds like it's hitting in the second quarter of 2024. Do you expect there to be subsequent development revenue around that project for the balance of the year, or is that going to be kind of a one-time thing where maybe we get other slabs of it in future periods prior to high volume production, or help us frame if that's a one-time thing? Yeah, again, this is Mitch.
<unk>.
Speaker Change: Yeah.
Speaker Change: Ponant of that that sounds like it's hitting in the second quarter 2024.
Speaker Change: There do you expect there to be subsequent development revenue around that project in the balance of the year or is that can it be kind of a one time thing that you know maybe we get other slabs.
Speaker Change: Slabs of it in future periods prior to.
Speaker Change: High volume production or you know.
Speaker Change: So help us frame, if that's a onetime thing.
Speaker Change: Yes.
Mitch: Again this is Mitch.
Mitch: It's not a one time payment are the development and the milestones will continue.
It's not a one-time payment; the development and the milestones will continue up until that start of production, as I indicated two and a half to three years from now. It will probably be a bit more lumpy compared to product sales, but you can see a pretty significant portion this quarter, and then there will be follow-on development revenue as part of this project.
Mitch: Up until that server production as I indicated two and a half to three years from now it will probably be a bit more lumpy compared to product sales.
Mitch: But you can see a pretty significant portion of this quarter.
And then there will be follow on development revenue as part of this project.
Speaker Change: Great. Thank you.
Speaker Change: Our next question comes from the line of <unk> <unk> with Craig Hallum. Please proceed with your question.
Our next question comes from the line of Shadi Mitwalli with Craig Hallam. Please proceed with your question. Hey, this is Shadi Mitwalli.
Speaker Change: Hey, this is shouting that Wally on for Richard Shannon. Thanks for taking my question.
Hey, this is Shadi Mitwalli on behalf of Richard Shannon. Thanks for taking my question. I want to start off with a clarification question. The new auto award mentioned in the PR and on the call, is this the same one mentioned at the end of March?
Speaker Change: Start off with a clarification Cliff equation question, a new Auto award mentioned in the PR isn't on the call is this the same one mentioned end of March.
Yes, yes, it is.
Speaker Change: Yes, yes it is.
Wally: Great. Thanks for thanks for that and then this $10 million fee.
Great, thanks for that. And then this $10 million fee, it sounds like... Most of it's going to be recognized in Q2, and then the rest of it throughout fiscal 2024, or is it all going to be recognized in Q2?
Wally: It sounds like.
Wally: Most of it's going to be recognized in <unk> and then the rest of it throughout fiscal 'twenty 'twenty four or is it all going to be recognized in Q2.
Speaker Change: Yeah actually all of it is recognized within Q2 and then.
Yeah, actually, all of it is recognized within Q2. And then, you know, my answer to the previous question, there will be subsequent development revenues on top of the 10 million in the second half of the year.
Speaker Change: You know my answer the previous question there will be subsequent development revenues on top of the $10 million in.
Speaker Change: In the second half of the year.
Okay, that makes sense. And then with the guidance given of 15 to 25 million for the year, we already know about, you know, 12 million of that. Unknown Attendee, Hull Xu, Jun Pei, Mitch Hourtienne, Gautam Narayan, Kevin Garrigan,
Speaker Change: Okay that makes sense and then.
Speaker Change: With the guidance of $15 million to $25 million for the year you already know about.
Speaker Change: $12 million of that.
Speaker Change: To make up the rest of that $3 million to $13 million in revenues.
Speaker Change: I'd like to give some more color on you know whether it has to be made up of primarily and our E or product sales.
Speaker Change: Yeah, that's a good question Charlie.
Yeah, that's a good question, Shadi. It will be a mix of both. As we indicated in the call, we're working on two or three other OEM projects. Both of those will have significant NRE contracts as well as early sample sales. The details are not signed yet by the customer or by Cepton, and so that's why we have a bit of a range on the forecast as we finalize the timing and the category of those paintings.
Speaker Change: It will be a mix of both.
Speaker Change: As we indicated in the call or working on a two or three other OEM projects. Both of those will have significant N E contracts as well as early sample sales. The details are not final yet.
Speaker Change: By the customer or by Sept on and so that's why we have a bit of a range on the forecast as we finalize the timing.
Speaker Change: And the category adults payments.
Speaker Change: That makes sense. Thanks for taking my questions and that's all for me.
Speaker Change: And our next question comes from the line of Kevin Garrigan with West Park Capital. Please proceed with your question.
[inaudible]
Kevin Garrigan: Yeah, Hey, al Thanks for letting me ask a few questions and congrats on all the progress.
That makes sense. Thanks for taking my questions, and that's all for me.
Kevin Garrigan: Progress.
Kevin Garrigan: First I know you guys had previously had one.
Kevin Garrigan: But this automotive when an OEM seems a little more secure if you will but I'd love to just get your thoughts on on how important it is to get that first design win or just to secure a design win is it kind of put you in a better position to win these other rfps that you're you're fighting for.
Speaker Change: Yeah definitely good question Kevin.
Our next question comes from the line of Kevin Garrigan with West Park Capital. Please proceed with your question.
I'm kind of on the forefront of the customer side I'll answer your first this is Mitch.
Yeah, hey all, thanks for letting me ask a few questions and congrats on all the progress. First, I know you guys have previously had one GM, but this automotive win in OEM seems a little more secure, if you will. But you know, I'd love to just get your thoughts on how important it is to get that first design win or just secure design win. Does it kind of put you in a better position to win these other RFPs that you're fighting for?
Mitch: Yeah, there's a lot of lessons learned from the GM program that go into our product evolution. You show that you see that showing up in our new ultra product. So all of the design and manufacturing lessons learned are built into our ultra product you see it in our new software ecosystem product called studio beds.
Yeah, definitely. Good question, Kevin. Since I'm kind of on the forefront of the customer side, I'll answer you first. This is Mitch.
Yeah, there are a lot of lessons learned from the GM program that go into our product evolution. You see that showing up in our new Ultra product, so all of the design and manufacturing lessons learned are built into our Ultra product. You see it in our new software ecosystem product called StudioViz that we announced last week. Again, this is pretty unique in the industry in that it takes into account all the manufacturing variances of building a LiDAR. And then I think maybe one of the last but not least important lessons learned is the supply chain. You know, we have
Mitch: We announced last week.
Mitch: And this is pretty unique in the industry and that it takes into account all of the manufacturing variances of building a lidar.
Mitch: And then I think maybe one of the last but not least.
Mitch: Important lesson learned is the supply chain you know we have we're carrying over some of the suppliers that worked really well on the GM project and finding new suppliers as our product has evolved so yeah. It puts us in a very competitive position for these new rfps.
Speaker Change: Yes got it okay.
Yeah, I mean, just a couple of sentences over that, you know.
Speaker Change: A couple of sentences over that you know where the few lidar companies that had a D central radio for automotive deployment and in that.
Speaker Change: From hardware to software as a complete suite that can be ported over with minor modifications for future project and that's elevated us into a very different position in terms of future our skills in design wins. So it is a big deal really are giving the history. We've worked on there is really nobody stayed to work.
Speaker Change: Yeah.
Speaker Change: Yeah, no that makes a ton of sense and I appreciate all that color.
Yeah, no, that makes a ton of sense. And I appreciate all that color. Okay, perfect. And then my second question, you know, looking at your StudioViz simulation platform, it seems like there's a couple other lidar companies that have also come out with, you know, some simulation platforms. Was this kind of something that OEMs were asking a lot of the lidar companies to provide to kind of speed up lidar development?
Speaker Change: Okay Perfect and then my second question you know looking at your studio there's stimulation platform. It seems like there is a couple of other other liner companies that have also come out with some stimulation platform was this kind of something that Oems, we're asking a lot of the lighter companies to provide the kind of speed up what our development.
Speaker Change: Yeah definitely some Oems have asked for this although I'll say many do not necessarily after these it usually comes later on in the development. After you win a program. It's a realization that this should have been available earlier.
Yeah, definitely. Some OEMs ask for this, although I'll say many do not necessarily ask for it. It usually comes later on in the development process after you win a program. It's a realization that this should have been available earlier or used earlier by the OEM. And so that's a big lesson learned from our first program. We did develop a customized simulator for the first OEM award. But rather than repeating that and doing a custom design for each customer, we've come out with this product, which incorporates a lot of the lessons learned and can be used across the customer base.
Okay, got it guys. That makes sense. And then just last last question, if I if I can.
Speaker Change: Used earlier by the OEM and so that's the big lesson learned from our first program. We did we did develop a customized simulator for.
Speaker Change: The first OEM Award.
Speaker Change: Rather than repeating them doing a custom for each customer and we've come out with this product, which incorporates a lot of the lessons learned and can be used across the customer base.
Speaker Change: Okay got it got it that makes sense.
Speaker Change: And then just last last question if I if I can so we've heard a few of your competitors speak about the recent nitsa ruling for Armani automatic emergency braking systems I'd love to hear your guys' thoughts on it and kind of where you think it means for the lighter industry.
So we've heard a few of your competitors speak about the recent NHTSA ruling for automatic emergency braking systems. I'd love to hear your guys thoughts on it and kind of what you think it means for the LiDAR industry. Unknown Attendee
Speaker Change: Yeah.
Yeah, that's a good point. You know, we didn't talk about that today.
Speaker Change: Good point, you know we didn't talk about that today I didn't see it was talked about quite a bit last week by our competitors.
I did see that it was talked about quite a bit last week by our competitors. It's a huge hallmark for the industry to adopt new technologies like LiDAR. I mean, camera and radar, ultrasonic, these are all proliferating about as much as they can be across the automotive landscape to reduce accidents. So I think it's a key recognition by regulators that, you know, pedestrian deaths still aren't going down, and that it won't be tolerated forever, right? There are new technologies like LiDAR becoming available, and it's becoming cost-effective. It's becoming easier to integrate them into the vehicles, so this is just another tailwind for our industry.
Speaker Change: Huge hallmark for the industry to adopt new technologies like Lidar, I mean camera and radar ultrasonics, either all proliferate it about as much as they can be across the automotive landscape to reduce accidents. So I think it's.
Speaker Change: A key recognition by regulators that you know pedestrian deaths still aren't going down.
Speaker Change: And that it won't be tolerated forever right. There are new technologies like Lidar, becoming available, it's becoming cost effective it's been.
Speaker Change: Covering easier to integrate onto the vehicles.
Speaker Change: So this is just another tailwind for our industry right now.
Speaker Change: Yep got it got it okay perfect I appreciate the color thanks, guys.
Yep, got it. Got it. Okay, perfect. I appreciate the color. Thanks, guys.
Speaker Change: Thanks.
Speaker Change: And our next question comes from the line of Gus Richard with Northland Capital. Please proceed with your question.
And our next question comes from the line of Gus Richard with Northland Capital. Please proceed with your question.
Auguste Philip Richard: Yes. Good afternoon, all thanks for taking the question.
Yes, good afternoon all. Thanks for taking the question. Last fall, the OEM sort of hit the pause button on Unknown Attendee, Hull Xu, Jun Pei, Mitch Hourtienne, Gautam Narayan, Kevin Garrigan. The progress these guys are making on moving towards adopting LIDAR, you know, what has changed in the last 180 days?
Auguste Philip Richard: Last fall the Oems sort of hit the pause button on.
Auguste Philip Richard: You know automation, if you will and just wondering.
Auguste Philip Richard: No.
Auguste Philip Richard: There are a number of different reasons could you kind of talk about.
Auguste Philip Richard: The sense of urgency or you know.
Auguste Philip Richard: The <unk>.
Auguste Philip Richard: Progress. These guys are making on moving towards adopting lidar what has changed in the last 180 days.
Speaker Change: Yeah, I'll start with that one guy that's good question.
Yeah, I'll start with that one, Gus. Good question. I think, first of all, there's still a strong appetite for LiDAR from the OEM. You see that in our RFQ and RFI updates as well as, you know, broadly within the industry. I do think, and we just talked about legislation, one of the emphasis points for the adoption of LIDAR is becoming more toward safety versus autonomy. And I think that's something that maybe has shifted a little bit in the past six months to a year as we talk about, you know, automatic emergency braking and systems like this that can reduce accidents and deaths. This is becoming a key focal point of the industry versus hands-free driving and some of the more convenient features that these systems were aimed at three, four years ago.
Speaker Change: I think if you know first of all there is still a strong appetite for lidar from the OEM do you see that in our RF SKU in RFID updates as well as you know broadly within the industry.
Speaker Change: I do think and we just talked about the legislation one of the emphasis points for the adoption of lidar is becoming more towards safety versus autonomy.
Speaker Change: And I think that's something that maybe has shifted a little bit the past six months to a year.
Speaker Change: We talk about you know automatic emergency braking and systems like this that can reduce accidents and deaths.
This is becoming a key focal point of the industry versus hands free driving in some of the more convenient features.
Speaker Change: You know that these systems were aimed at a you know three or four years ago.
Speaker Change: Got it and then.
Got it. And then, um, you know, sort of any update on GM and, you know, after the re-scope, are they going to move forward? What are their plans for using your LIDAR?
Speaker Change: Update on on G M and you know what.
Speaker Change: After the re scope or are they going to move forward what are there.
Speaker Change: No plans for using your lidar.
Speaker Change: Yeah, well, it's a good question I you know we can't go into too many details on what GM strategy is I know, it's been a bit quiet on their front for the past six months I wouldn't really say, it's because of their autonomy systems I think they're still working on these systems.
Yeah, that's a good question. I, you know, we can't go into too many details on what GM's strategy is.
But they you know they obviously the downturn in the EV cycle, it's probably impacting some of their priorities. We still are you know, we're showing off the ultra product to all of the Oems that includes general motors.
I know it's been a bit quiet on their front the past six months, but I wouldn't really say it's because of their autonomous systems. I think they're still working on these systems, but obviously, the downturn in the EV cycle is probably impacting some of their priorities. We still are, you know, showing off the Ultra product to all of the OEMs, and that includes General Motors. All of the lessons learned from our last four years of working with them put us in a very good position once they announce their next consumer product that uses LIDAR, and we're confident they will, that we're really well-positioned to support them again.
Speaker Change: All of the lessons learned from our last four years of working with them puts us in a very good position to once they announce their next consumer products that use lidar and we're confident they will that we're really well positioned to support them again.
Speaker Change: Got it and then I guess the last one for me and I'm not sure you can provide much of an update but I'll ask anyway.
Got it. And then I guess the last one for me, and I'm not sure you can provide much of an update, but I'll ask anyway, the COITO offer to buy Cepton. Can you provide us with any update on where that stands? And, you know, what's going on in that area? Yeah.
Speaker Change: We do offer to buy a set time you know can you provide us with any update on where that stands and you know what's what's going on in that area.
Yeah, Gus, Jun here. Thanks for the question. Yeah, we, it's been a few months since we received the initial offer. And there's not too much detail I can disclose, but we're actually actively working on this process. It's a two big, you know, public company.
Speaker Change: Oh Gosh June here, thanks for the question.
June: Yeah. We are it's been a few months since we received the initial offer and there's not too much detail I can disclose but we're actually we're actively working on this process. It's too big you know public company. So it's a pretty complicated process that knees Oh.
So this is a pretty complicated process that needs a little bit more time. But again, I assure you that we are working on it. Just there are no details. So we're ready to disclose publicly. For that, I'll just have to say stay tuned for further news. Got it. Thanks so much for that update.
June: A bit more time, but again I assure you that we are working on it just there's no details out we're ready to disclose publicly for that I'll just have to say stay tuned for further news.
Speaker Change: Got it thanks, so much for that update that's it for me.
Got it. Thanks so much for that update. That's it for me.
Speaker Change: Thank you.
Speaker Change: Yeah.
We have reached the end of our question and answer session. And with that, I would like to turn the floor back over to CEO Jun Pei for any closing comments.
We have reached the end of our question and answer session and with that I would like to turn the floor back over to CEO, Jim Payne for any closing comments.
Yeah, thanks again everyone for attending our quarterly conference call. As you have witnessed, Cepton is working on cutting-edge technology and making continuous commercial progress. So we'll keep you updated as we have more exciting news coming our way. Thank you.
Jim Payne: Yeah. Thanks again, everyone for attending our quarterly conference call.
Jim Payne: Fitness <unk> is working on the cutting edge technology, and making continuous commercial progress so.
So we'll keep you updated as we have more exciting news coming our way. Thank you. Thank you very much.
Jim Payne: Yeah.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Jim Payne: Okay.
Jim Payne:
Jim Payne: Yeah.
Jim Payne:
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Jim Payne: Mhm.
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Jim Payne: Okay.
Jim Payne: Mhm.
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Jim Payne: Hum.